House transparency bill is a major first step to transform health care in America

The U.S. House of Representatives recently took important steps to broaden health care price transparency systemwide by passing the popular and bipartisan Lower Costs, More Transparency (LCMT) Act.

For nearly three years, hospitals and health insurers have failed to fully comply with a rule requiring them to disclose their actual prices for treatments and services. As a result, patients, employer and union purchasers, and workers have been left in the dark. Hospitals and health insurers have been able to hide excessive fees, overcharges, billing errors and fraud.

The LCMT Act will strengthen enforcement and broaden price disclosure requirements to ambulatory surgical centers, laboratories and imaging centers. The bill takes a major step toward empowering consumers with upfront prices so that they can identify wide price variation and find the best care at the lowest price. By passing this bill, Congress demonstrated a commitment to protecting patients and employers from rampant overcharges with honest, transparent, and affordable pricing for their health care needs.

The insurance and hospital industries are the third- and fourth-highest revenue and profit generating industries in the U.S., so it’s no surprise then that national health expenditure data show Americans spending more and more on health care each year. This increase is due to the current broken system with hidden prices, which allows the industry to charge consumers whatever it wants.

Hospitals have become known for inconsistent prices, which can vary by 10 times or more, even at the same hospital. These widespread price variations come at an enormous cost to patients and their employers, who often cannot afford to overpay for necessary care. Under our current system, the cost of health care in America is twice that of several other developed nations, which also boast significantly longer average lifespans.

This problem is made worse by a failure to enforce existing regulations aimed at increasing transparency. As of July, just 36 percent of American hospitals reviewed were fully complying with the Hospital Price Transparency Rule, which requires hospitals to publish all upfront prices for all items, services and pharmaceuticals. The rule clearly states that published pricing files must reveal rates negotiated with insurers in addition to the discounted cash price. Nevertheless, patients are still being denied the information necessary to protect their health. While the Centers for Medicare and Medicaid Services (CMS) deemed approximately 1,800 hospitals to be noncompliant with the federal rule, it has issued civil monetary penalties to only 14 hospitals for lack of compliance.

This lack of transparency has real effects on the lives of patients, with many vulnerable populations being taken advantage of by the industry. Enforcing hospitals’ compliance through the LCMT Act would empower patients to make informed financial decisions rather than be overcharged with no explanation.

Price transparency is already proven to work. Bricklayer and Sheet Metal Worker unions in the Northeast relied upon available price transparency data to demonstrate that their insurer was overcharging them, allowing the unions to sue their insurer for price-gouging. Even more Americans could benefit from price transparency if they could readily access pricing data and use it both to shop for care and to verify that their bills are accurate.

Lawmakers in both the House and Senate must continue working to pass legislation to ensure that agencies enforce transparency rules. Polling reveals that a supermajority of nearly 90 percent of Americans are united in their support for health care price transparency — a promising sign for the future of this bill and other bipartisan efforts to reduce out-of-control health care costs in our country.

At a time when 100 million adults are burdened with crippling medical debt, Congress should be applauded for its efforts to restore trust in the American health care system and secure a healthier future for all patients.

Cynthia Fisher is founder and chairman of the nonprofit organization Patient Rights Advocate.